Expert: Latvia keeps energy prices low by postponing costly investments

17.07.2013, 11:00

The Latvian energy policy is geared towards consumer protection, keeping prices lower by avoiding expensive energy projects, said energy policy expert Andres Mäe.

The policy also means lower production capacity and a lack of energy connections with other countries, ERR News reported.

Latvia has had less interest in connecting its market with the rest of the Baltics and Scandinavia, said Mäe. He charged that Latvia likely had agreements to buy electricity from Russia and Belarus at a cut rate.

Estonia's southern neighbor has vast natural gas storage facilities, and has thus preferred gas to electricity, but the Latvian gas market will become deregulated at the beginning of 2014, meaning higher gas prices.

At one point in June, the price of electricity in the Baltic trading area jumped to 103 euros per megawatt hour, much higher than in the neighboring Nordic countries.